Money expected to be borrowed to finance investment

Assignment Help Financial Management

Reference no: EM131910424

1. When estimating cash flows, include interest expense on money expected to be borrowed to finance the investment or not?

Yes--it is an incremental expense

Yes--it is not an incremental expense

No--it is an operating cash flow

No--it is a financing cash flow

2. Kleen Corp owns equipment purchased a few years ago. A used equipment dealer has offered $80,000 to buy the equipment from the company. A start-up division of Kleen wants the equipment to use in its new business. Kleen wants to charge the start-up division for the equipment. The start-up division argues that the equipment is a sunk cost and should not be charged for it--it was bought and paid for years ago. Who is right--is this a sunk cost or something else? Select the best answer.

1) Fixed cost -- dont charge the start up

2) opportunity cost -- charge the start up

3) incremental cost - charge start division

4) sunk cost -- charge the start up division

Reference no: EM131910424

Questions Cloud

Improve the job satisfaction of employees : You work in the HR department of a company that wants to improve the job satisfaction of its employees.

Publicly owned and publicly managed venues versus publicly : Explain the differences between publicly owned and publicly managed venues versus publicly owned and privately managed venues.

Write a childrens book similar to the story told by matar : Write a children's book similar to the story told by Matar from the perspective of different members of his family or outsiders.

Determine the irr for project using financial calculator : An investment project has an initial outlay of 100,000 and is expected to generate annual cash inflows of 28000 for the next 5 years

Money expected to be borrowed to finance investment : When estimating cash flows, include interest expense on money expected to be borrowed to finance the investment or not?

What is the pay back period of project : what is the pay back period of this project their acceptance period is 5 years

Determine the payback period : A project requires an initial outlay of 100,000 and is expected to generate an annual net cash inflow of 28000 for the next 5 years determine the payback period

What is the expected return of portfolio : What is the expected return of your portfolio if jacob bella and edward have expected returns of 0.04, 0.15 and 0.08 respectively

How is the concept of cultural encounter treated : How is the concept of cultural encounter treated in the short story The Distant Past? What clues do they provide of such awareness?

User Account

All Pages